A new study out of the Economic Innovation Group considers a puzzling question that directly involved commercial real estate. As EGI Chief Economist Adam Ozimek and Associate Economist Eric Carlson wrote, "If remote work has reduced the demand for living in big cities, then why have their rents gone up so much?"

An excellent question for an industry that should want to understand a curious dynamic of an unusual time. Near the heart of the question, at least for Ozimek and Carlson, is the issue of extensive margins and intensive margins. Used in economics, the two terms refer to use of resources: how widely a resource is used (extensive) and how intensely or to what degree the resource is used (intensive).

In labor economics, extensive margin is the number of people working and intensive margin is the amount of effort workers put in. There is a balance between the two. More people can be available to do work (extensive), or people can work longer hours (intensive) to get something done.